Credit builder credit cards

If your credit score has been impaired, you can still get a credit card. In fact, you can use a credit card to improve your credit score.

By   |   Verified by Yvonne Taylor   |   Updated Dec. 4, 2023

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Comparing credit builder credit cards

Chime Credit Builder Secured Visa® Credit Card

On website

Chime Credit Builder Secured Visa® Credit Card

Balance transfer


Purchase rate

0% p.a. ongoing

Annual fee

$0.00 p.a. ongoing


  • No interest or annual fees.
  • No credit check to apply.
  • No minimum security deposit is required.

Disclaimer: Chime is a financial technology company, not a bank. Banking services provided by, and debit card issued by, The Bancorp Bank or Stride Bank, N.A.; Members FDIC.

Discover it Student Cash Back

Discover it Student Cash Back

Balance transfer

6 months at 10.99% p.a.

Purchase rate

6 months at 0% p.a.

Annual fee

$0.00 p.a. ongoing


  • No annual fee. No credit score required to apply
  • Students earn 5% cash back on everyday purchases during the school year (and all year long) at different places each quarter.
  • Get an unlimited dollar-for-dollar match of all the cash back you've earned at the end of your first year.
Capital One Platinum Secured Card

Capital One Platinum Secured Card

Balance transfer


Purchase rate

30.74% p.a. ongoing

Annual fee

$0.00 p.a. ongoing


  • $0 p.a. annual fee.
  • With responsible card use, you could earn back your deposit and upgrade to a standard, unsecured Platinum card
  • No foreign transaction fees. No replacement card fees. No authorized user fees.
Discover it® Secured Credit Card

Discover it® Secured Credit Card

Balance transfer


Purchase rate

22.99% p.a. ongoing

Annual fee

$0.00 p.a. ongoing


  • Get a real credit card with no annual fee.
  • Your credit line will equal your deposit amount, starting at $200.
  • Build credit responsibly with this your Discover it® Secured Credit Card.

If you don't have the best credit score you might have a difficult time getting approved for loans or traditional credit cards. Your credit score can have an impact on a lot of aspects of your financial life, making it harder for you to make larger purchases that people with good credit are able to make because of credit cards and other loan options.

When you're struggling because of your poor credit history, or lack of credit history because you're young or a recent migrant, there are steps you can take. One of the best options to start rebuilding your credit is to look for credit cards that build credit over time. Whether you're dealing with bankruptcy or another form of insolvency, improving your credit score using a secured credit card is a great first step in getting back on track financially. You have a number of options when it comes to credit cards for bad credit in the USA, as most major banks offer secured cards as an option through their websites or branches.

Security deposit or collateral

A secured card, unlike an unsecured one, requires a security deposit to open the account. That deposit dictates how large a credit limit your card will have, and is used as insurance (known, in this case, as collateral) in case you aren't able to make your payments. The good thing about this type of card is that if you make your payments on time you can use that payment history as a way of getting approved for an unsecured credit card.

Interest rate and repayment

When someone thinks of credit cards for people with bad credit they typically think of high interest rates and multiple fees. However, if you shop around there's a good chance you can find a card that has a manageable interest rate. There can be fees attached to both unsecured and secured cards, such as an annual fee, but if you know what you're getting into you can budget accordingly for these costs.

Of course, when it comes to repayment it's essential that you make your payments on time each month. Even if you can't pay the full balance, you should be putting down the minimum payment to make sure you never miss a bill due date, and preferably a lot more than the minimum. A good rule of thumb when it comes to building credit with a credit card is to try and stay below 30% of your credit limit. This shows lenders that you're able to use the card and make payments without overextending yourself.

Effect on your credit score

If you budget your finances properly and stay on top of your credit card payments, using a credit card to improve your credit score is a good idea because the card issuer will report your good payment record to American credit bureaux.

Effect on your credit limit

One of the nice things about using a secured card is that you're basically setting your own credit limit through the deposit you put down on the card. If you put less money down you'll have a smaller balance than if you put down a larger deposit. Just remember that the goal is to improve your credit score to the point where you can move over to an unsecured card where there are fewer fees and you get your deposit back.

Credit repair after insolvency

Repairing your credit after declaring bankruptcy or dealing with another form of insolvency can be overwhelming. You just need to remember that there are systems in place to help you get back on your feet. Not only can you work with an insolvency firm or speak directly to creditors, but you can also use budgets and credit cards to start repairing your credit.

The most important first steps you can take after dealing with bankruptcy is to set a budget for yourself that will work, based on fixed expenses and incomes. Once you have those figures sorted out, you can start looking into opportunities to improve your borrowing power. Working with a bank is a great way to begin rebuilding your credit score and can be invaluable when it comes to learning about other options you may have.

Convenient payment method

Outside of being able to rebuild your credit by always paying your credit card account when it comes due, this kind of card is also great for making purchases online. This is a convenience a lot of people take for granted when they have a credit card but it's something you can enjoy with a secured card. Of course, you just need to do everything you can to remember to pay the credit card bill when it comes in, to avoid impacting your credit score in a negative way.

Alternatives to credit builder credit cards

If you've decided that now isn't the time to get a credit card or you can't get approved right now, there are a couple of popular alternatives that you could also consider. While these won't improve your credit score, they don't have an annual fee or interest rate you need to worry about. Also, both of these options can be used online to make purchases:

  • Debit card. Using your bank card is a great way to limit your purchases to what funds you have available in your account rather than using credit to buy things you may not be able to afford. Debit cards are also available for use nearly everywhere that credit cards are accepted. While some online stores may not accept a debit card in place of a credit card, there are plenty of alternative options online that will support this method of payment.
  • Prepaid credit card. A prepaid card is a good option for you if you want to have all of the functionality of a traditional card without the annual fee or interest rate. The other nice feature of the prepaid option is that your purchases are limited to the amount that you put on the card. This means you don't need to worry about overspending or paying back a large bill at the end of the month.

However, there are further options that will help to improve your score:

  • Secured personal loan. You may not be able to qualify for an unsecured personal loan repayable by instalments, but you may be able to qualify for a secured loan. As with a credit card, you must keep up with repayments so that your good record is reported to credit bureaux.
  • Credit builder loan. Some banks have specific products called credit builder loans, where you borrow money to put in a term deposit. Once you've met all the repayments, the funds are yours to keep as savings or otherwise invest. And your repayments will have played their part in repairing your credit.

Learn about credit builder credit cards

What are credit builder credit cards, do they work, and are they worth it?

  • FAQs

  • Pros & cons

  • Tips

Are there other ways to rebuild my credit?

Some other ways to improve your credit rating include paying your outstanding loan balances, making prompt payments on your mortgage or utility bills, and paying any other monthly bills on time each month.

If you have collateral to offer you could also apply for a secured personal loan. If you have no collateral, there is another option – a credit builder loan, where you borrow money and place it in a deposit account, where you are unable to access it until the loan is fully repaid.

Can anyone apply?

You need to be at least 18 years old to apply for any credit card in the USA. And while you should be able to get approved for a secured credit card with a very low or even non-existent credit score, it's not certain unless you apply for one of the very few secured cards with 'guaranteed' approval. What this means is that the card issuer will not look at your income or credit score, but just at the funds you are offering as collateral.

How quickly can you rebuild credit with a credit builder credit card?

If you use your card responsibly, ideally keeping the balance at not more than 30% of your credit limit and repaying substantial amounts – preferably the total balance – each month, you should begin to see an improvement in your score in as little as six months.

What sort of interest rates do secured credit cards have?

Interest rates are typically at the higher end of the market, at around 20% APR. Even secured cards advertised as 'low rate' are likely to have an APR around 15%, which is much higher than the rate offered by many low rate unsecured cards.

Will I get my deposit back?

If you make your payments on time each month then you'll get your deposit back once you transition to an unsecured credit card.

Annual fee

Credit builder cards usually (but not always) have an annual fee, which could be quite substantial. Try to choose a card which has some extra benefits to justify the fee, or one with no annual fee if you are on a really tight budget.

Control your credit limit

Instead of having to accept whatever credit limit the bank assigns to you, with a secured credit builder credit card you set your own credit limit based on the amount of collateral you are able to offer as a guarantee.

Credit is limited by your collateral

You won't be offered a credit limit that is greater than the amount of collateral you can offer. For example, if you can only put down $500 as collateral, that's the maximum possible credit limit you will be given. If you have no collateral, you won't be approved for a secured card at all.

Rebuild your credit

The obvious benefit of a secured credit card account that is used responsibly and paid promptly is that it will, given time, improve your credit score.

Temptation to spend

If you can't resist spending more than you can afford to repay on your secured credit card, you will end up paying interest on the balance, and could lose your deposit if you fail to make repayments. Running a balance will also increase your credit utilization ratio, which will have a downward effect on your credit score.

Transition to unsecured credit card

Once you have demonstrated your ability to use credit sensibly and competently, by paying off the account balance on your secured card in a timely fashion, you should be able to be approved for an unsecured card, and have your collateral returned to you,

This transition from a secured credit card to an unsecured card is something you'll need ask the lender about before you sign up, to make sure it's something they offer and so that you can find out how long it usually takes for the process to happen.

Check your lender's reporting policies

You should also review the policies of the lenders, to see how often they provide credit bureaux with updated reports based on your payment history. Regular reporting at short intervals will ensure that your credit is improving as quickly as possible. Some banks only report every six months while others may provide updates every month.

Don't max out your card

Once you've been approved for your secured credit builder card, you should certainly use it – you can't demonstrate responsible use of credit and a good repayment pattern if you don't – but do try to avoid spending more than 30% of your credit limit at any one time, to improve your credit utilization ratio and avoid appearing over-extended.

Do your research

Any time you're looking into ways to improve your credit score you need to spend some time researching your options. This includes looking at different lenders to see what interest rate and annual fee they have attached to the card they're offering. Most of the major banks in the USA offer secured cards as a way to rebuild your credit, but each of them has different fees and conditions attached. That's why you need to take your time to sort out what you're getting when you sign up. Always look into the differences between what lenders are offering to see what works best for your specific needs.

Look for a low minimum deposit

If you don't have much cash on hand to offer as collateral, you'll need to check each card's minimum deposit requirements, because a low deposit will limit your choices.

Pay your credit card bills on time

This one is a given, but it's critical that you pay your bill when it comes in. Never wait until the day your bill is due because it takes time for the payment to be processed and you don't want to be penalized for a late payment because of the delay. You should also try and make it a habit of paying off much more than the minimum payment each month – and preferably the whole balance – to make sure that you don't have a snowball effect of a spiralling bill.